They both looked fine to me but human readability shouldn't be the primary goal of a data format. I think the example is bad for both formats because it conflates tree data structures and logical hierarchy. The memory model of the application consuming the data would likely look like that, but that doesn't mean that's how it should be stored/transmitted, that should be probably be flattened, with each employee having a "manager" property.
Yeah, that is a good point. It does seem to come up a lot in regards to data formats, that of how human readable they are. So I don't think it's without value, but shouldn't be what they are optimized for since it's usually software doing the reading most of the time, and not human eyes.